SHARE

ARTICLE

SBI Life’s Poorna Suraksha Policy is a term life insurance policy which offers an innovative critical illness cover. Term life insurance is life insurance that pays out only on death and has no maturity value. Critical illness cover is a policy cover that pays out on the diagnosis of a specified illness whether or not you die as a result of it. Commonly covered illnesses include heart attacks and some types of cancer. We explain why this particular combination is a growing trend in the life insurance industry, here.

In this policy, initial life insurance to critical illness break-up is in the 80:20 ratio. As you get older, the policy reduces the life insurance cover and increases the critical illness cover. However, the overall sum assured is kept constant. The reason is simple, you are more likely to fall ill as you get older and less likely to need term insurance as your children grow up and become independent. Your premiums are also kept constant.

The policy covers 36 critical illnesses. It also waives future premiums on the diagnosis of a critical illness. If however, you pass away within 14 days of diagnosis of a critical illness, you do not get money under the critical illness cover. You will instead get the term insurance cover.

The policy will increase the critical illness cover at different rates for different policy terms. These are as follows:

Term

Rate of Critical Illness Cover hike (%)

10

15

15

10

20

7.5

25

6

30

5

So how does the policy actually work?

Here is an example:

Mr Anand has chosen a sum assured of Rs 20 lakhs and a policy term of 10 years.

Year

Total Cover

Critical Illness Cover

Life Cover

1

20,00,000

400,000

16,00,000

2

20,00,000

460,000

15,40,000

3

20,00,000

520,000

14,80,000

4

20,00,000

5,80,000

14,20,000

5

20,00,000

6,40,000

13,60,000

6

20,00,000

700,000

13,00,000

7

20,00,000

760,000

12,40,000

8

20,00,000

820,000

11,80,000

9

20,00,000

880,000

11,20,000

10

20,00,000

9,40,000

10,60,000

If Mr Anand is diagnosed with a critical illness in the fifth year, he will be paid Rs 640,000 and future premiums will be waived off. His life cover of 13,60,000 will continue at the same level for the rest of the policy term.